Reduction in Reserve Requirements

BANGKO SeNrnIL NG PIulrrlNas OFFICE OF THE GOVERNOR clRcurAR No.1004 Series of 2018 Subject: Reduction in Reserve Requirements The Monetary Board, in its Resolution No.471 dated 22 March 2OL8, approved the 100- basis-point reduction in the reserve requirement ratios of selected reservable liabilities of universal/commercial banks (UBs/KBs) and non-bank financial institutions with quasi- banking functions (NBQBs). As a result, the following provisions of the Manual of Regulations for Banks (MORB) and Manual of Regulations for Non-Bank Financial Institutions (MORNBFI) are hereby amended. Section 1. Subsections X253.1 and X405.5 of the MORB on reserves against deposit and deposit substitute liabilities shall now read, as follows: "xxx "SX253.1 Required reserves agoinst deposit and deposit substitute liobilities. The rates of required reserves against deposit and deposit substitute liabilities in local currency of banks starting reserve week l June 2018 shall be as follows: Reservable Liabilities UBs/KBs TBs RBs/ Coop Banks a. Demand Deposits 78% 8% 5% b. NOW accounts 18% 8% 5% c. Savings Deposits L8o/o 8o/o 3% d. Time Deposits, Negotiable Certificates of Time 78o/o 8% 3o/o Deposits (CTDs), Long-term Non-negotiable Tax Exempt CTDs e. Long-term negotiable certificates of time deposits L. LTNCTDS under Circular No. 304 4% 4% 4% 2. LTNCTDs under Circular No. 824 7% 7% 7o/o f. Deposit Substitutes (DS) L8% 8% NA g. DS evidenced by repo agreement 0o/o 0% NA h. IBCL (Sec. X343) 0o/o 0o/o o% i. Bonds 6% 60/o NA j. Mortgage/CHM cert. NA 6% NA k. Peso deposits lodged under Due to foreign banks L8% NA NA

Reservable Liabilities UBs/KBs TBs RBs/ Cooo Banks l. Peso deposits lodged under Due to Head L8% NA NA Office/Branches/Agencies Abroad (Philippine branch of a foreign bank) m. Basic deposit accounts , as defined in Sec. X222 of the o% o% o% MORBl t'xxx" '9X405.5 Reserues agoinst trust and other fiduciory occounts (TOFA) - Others. In addition to the basic security deposit, banks/institutions authorized to engage in trust and other fiduciary business shall maintain reserves on TOFA - Others, except accounts held under (1) Administratorship; (2) Trust Under Indenture; (3) Custodianship and Safekeeping; (4) Depository and Reorganization; (5) Employee Benefit Plans Under Trust; (5) Escrow; (71 Personal Trust (testamentary or living trust); (8) Executorship; (9) Guardianship; (10) Life Insurance TrusU (11) Pre-need Plans (institutional/individual); (12) Personal Equity and Retirement Account (PERA); and (13) Legislated and Quasi-Judicial Trust. "xxxtt Section 2. Section 4253Q and Subsection 4405Q.5 of the MORNBFI on reserves shall now read, as follows: "Sec. 4253Q P008 - 4246Q) Reserves Against Deposit Substitutes. NBQBs shall maintain required reserves equivalent to eighteen percent (L9%l of deposit substitute liabilities as defined in Section 95 of R.A. No. 7653, regardless of maturities except: (a) xxx; (b)xxx; (c) xxx; and (d)xxx starting reserve week l June 2018. t'xxx" "94405Q.5 Reserues against trust and other fiduciary accounts (TOFA) - Others. In addition to the basic security deposit, institutions authorized to engage in trust and other fiduciary business shall maintain reserves on TOFA-Others, except accounts held under (1) Administratorship; (21 Trust Under Indenture; (3) Custodianship and Safekeeping; (41 Depository and Reorganization; (5) Employee Benefit Plans Under Trust; (6) Escrow; (71 Personal Trust (testamentary and living trust); (8) Executorship; 1 The required reserves for banks shall take effect starting reserve week 23 February 2018 (Circular No. 992 series of 2018).

(9) Guardianship; (10) Life Insurance Trusu (11) Pre-need Plans (institutional/individual); (12) Personal Equity and Retirement Account (PERA); and (13) Legislated and Quasi-Judicial Trust. "xxxt' Section 3. This Circular shall take effect on l June 2018 after its publication either in the Official Gazette or in a newspaper of general circulation. FOR THE MONETARY BOARD: I I-J,-<-jr ftesron A. EfPENTLTA, J Govdfnor { ruay 2018